Need shopping money? Check your junk drawer for forgotten GCs

For this week’s No More Ls column, we’re reminding you to use those old gift cards and explaining how to get the most out of them.

If you’re battling guilt because you want to shop when you know you should save, know that there’s likely free money sitting in your junk drawer: gift cards. Your dreams of a new wardrobe refresh, slick golf equipment, or even an indulgent night out are within reach. 

It’s time to go through that stash of gift cards from the holiday season that you conveniently forgot about in your night table. If you haven’t already used them, before spending anything new, leverage your gift cards. The best part: When you use a gift card, your savings account balance stays the same. 

Keep reading as we answer your GC questions.

Do gift cards expire?

Good news: In Canada, most retail gift cards don’t expire, thanks to provincial consumer protection laws. Common exceptions include promotional (think coupons) or charitable gift cards, cards issued for free (free gift with purchase, for example), or cards for a specific service or product, such as a single spa treatment or an exercise class, explains Evie Bouras, a partner at McCarthy Tetrault, a business law firm based in Toronto that offers services in loyalty and gift cards in Canada.

Then there are gift cards with specific terms and conditions: shopping mall cards, referred to as open-loop cards, which can be used at multiple retailers; and prepaid credit cards (not to be confused with secured credit cards). 

What does “No Cash Value” really mean? 

When a gift card states that it has “no cash value,” that means the card may not be redeemed for cash instead of goods or services from the retailer. That said, some provinces require merchants to refund small remaining balances in cash upon request. If you have to use the card for purchases only, plan out what you’ll buy ahead of going into a store or business to make the most of the funds gifted to you. You may even score a deal.

What happens if I lose a gift card? 

Losing a gift card sucks because in most provinces, retailers are not required to replace a lost or stolen gift card, unless the terms and conditions say otherwise. The terms, often available on the issuer’s website, will tell you if you should call the retailer or even the police.

And it's not just the physical (or email) card that can go missing either. Balances can be stolen, too. Jatinder Banwai, who lives in Mississauga, Ont., and often uses gift cards that he and his wife are given, discovered he was a victim of gift card theft when he went to the cashier at Home Depot to buy a snow blower, only to be disappointed when his $350 worth of gift cards had a $0 balance. The cashier couldn’t help him at all.  

In a second instance, he had $120 of Canadian Tire money saved in his account and discovered that someone in Eastern Canada accessed his account and already redeemed the amount. Thankfully this incident had a happier ending: “I raised an issue with Canadian Tire and they were able to reinstate the funds,” explains Banwai.

Consumer protection laws generally prohibit merchants from charging fees for the issuance or use of gift cards, but they do not require merchants to replace cards that are lost or stolen,” says Bouras. 

To prevent theft, keep your gift card receipts, card numbers, and activation confirmations in the event you do lose a physical card—and leverage digital accounts where possible. Registering digital gift cards and linking cards to a customer or loyalty account, when available, makes it easier to track the use of the card and help a retailer verify the card should it go missing.

Moral of the story: Keep your cards organized so you don’t lose out on free money.

If the business closes, is my gift card null and void?

Flash back to the time I didn’t use my Mastermind Toys gift card in time before the company collapsed and was sold off. It still hurts. If a business closes before you’ve had the chance to redeem a gift card, gift card holders are typically treated as “unsecured creditors.” 

What does that mean? 

There’s no guarantee of recovery, and consumers may need to file a claim in insolvency proceedings to try to get the funds back by following special procedures under the Bankruptcy and Insolvency Act (BIA). But consumers are typically paid last, only after secured creditors like banks and priority claims such as employee wages.

Provincial and territorial gift card laws protect against expiry dates subject to exceptions and improper fees, but they do not guarantee reimbursement should the business cease to operate. 

Since my Mastermind card was a gift, I didn’t technically lose anything, so I simply let the amount go, but this is just another example of why it’s important to make a purchase as soon as you can.

Don’t leave gift-card money on the table 

If you’re not using the cards given to you, you’re contributing to the estimated $35 million of gift card money that goes unused by Canadians. 

“I have a storage box of gift cards from over the years that I have simply not gotten around to using, even though most of them are from places I currently shop,” admits Bahavini Patel, a mom and teacher in Brampton. Like the rest of us, Patel says she always has the intention of using cards immediately, but they get forgotten because she gets busy. 

“Gift cards are great for the seller, not so great for me.” Or for those who let inflation eat away at their cards’ values each year. 

Good advice: “Use gift cards sooner than later,” says Bouras. At the same time keep proofs of purchase and check gift card balances periodically so you don’t lose out on their dollar value. Choose gift cards with clear terms and no hidden fees when you’re giving them to others. Happy shopping! 

Read more from this issue of The Get:

1. How to split the bill at dinner with friends—minus the social awkwardness
2. Is summer really the best time to move house?
3. Katrice Justice on teaching Gen Z about money
4. Can you open an RDSP after you turn 18?